PPF vs GPF vs EPF: Differences, interest rates, benefits for you compared

PPF vs EPF vs GPF: If you are a working professional, you must have heard about Public Provident Fund (PPF), General Provident Fund (GPF) and Employees' Provident Fund (EPF). All the three schemes aim to help meet the future monetary needs of the subscriber. However, there is a lot of confusion about the similar sounding schemes. Here we take a look at the differences, interest rates and benefits of PPF, EPF and GPF. 

PPF: Any individual can open a PPF account in his/her name or on behalf of a minor. The scheme is open to all citizens. There is a lock-in period of 15-years on the PPF account, which can be further extended for a period of five years and more. 

The minimum investment one can make in PPF account is Rs 500, while the maximum limit is of Rs 1.5 lakh. The investment in PPF and the interest earned is eligible for income tax rebate. One can make yearly, quarterly, half-yearly, or monthly investment in PPF. The current rate of interest on PPF is 8 per cent and it is revised quarterly by the government. 

EPF: This is a savings scheme for working people in the organised and unorganised sectors. Both the employee and the employer contribute to the EPF account. The money invested in the EPF account is basically cut from the salary of the account holder. At present, the Employee Provident Fund Organisation (EPFO) provides 8.55% interest rate on investments in each account. All organisations having more than 20 staff have to open EPF account in their names. 

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One can make partial withdrawal from the EPF account in specific cases like buying a home, paying loan, marriage of children, brother etc. Up to Rs 1,50,000 invested in the EPF account gets tax rebate under Section 80C of the Income Tax Act. 

GPF: This scheme applies to only the government employees. The contributor in GPF account is the employee only, not the government. 

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Recently, the Union government hiked PPF and GPF rates. The rates of GPF and other related schemes was raised last month by 0.4 percentage points to 8% for the October-December quarter. The interest rate on GPF was 7.6% for the July-September quarter of 2018-19. 

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“... during the year 2018-2019, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8% with effect from 1 October 2018, to 31 December 2018,” a Department of Economic Affairs’ notification said. The raised interest rate would apply on Provident Funds of central government employees, railways and defence forces.